Effectiveness of store clustering by consumer life style
Transcript of Effectiveness of store clustering by consumer life style
Effectiveness of store clustering
by consumer life styleby consumer life style
Jointly Presented by
August 2008
• China 200 stores• Russia 30 stores• India 50 stores• Vietnam 25 stores
Project Partner
LOTTE GROUP
ㆍㆍㆍㆍLOTTE Group’s Total Sales in 2007 : USD 35 Billion
ㆍㆍㆍㆍThe Affiliate Companies : 44 Companies
LOTTE Shopping co., LTDㆍㆍㆍㆍ89th rank retailer in the world (2006) by NRF survey
ㆍㆍㆍㆍ1st rank retailer in Korea (2007) : USD 11 Billion
ChinaRussia
VietnamIndia
VRICs
LOTTE Mart Global Biz Plan by 2018
Company Profile
2
Sales (2007)
Major Types Hypermarket
USD 3.8 billion
Miscellaneous
Department Store
USD 5.2 billion
Supermarket
USD 0.8 billion
• 3rd Largest in Korea• 57Stores
• 1st Largest in Korea• 21Stores
• 2nd Largest in Korea• 79Stores
Company Profile Project Partner
B to B
Natural Fresh Foods Company
Foodmerce
Business Strategy
Core Business
• Market leader(M/S No.1) in Tofu, Sprout,
Refrigerated Noodle in Korea
• Created synergy through core competence
3
Domestic Global
B to C
Foodmerce
Pulmuone Wildwood
Lead Pulmuone’s globalization
• Developed US market since 1991
• Acquired Wildwood which is American style
Tofu manufacturing company in 2004
• Planning to enter into Chinese market
• Created synergy through core competence
in sourcing, manufacturing & logistics
• Net revenue is USD 0.8 billion in 2007
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180159
100100
200
Category Definition
The main ingredients, grain and starch,
are shaped and processed, than
combined with sauce (meat brew) and
garnish, kept and shipped by the Cold
Chain system and arranged in a
refrigerator
takes over USD 150 million won in the market place
and grows over 10% yearly
Refrigerated Noodle
[ Market Trend ]
4
7
0
'05 '06 '07 '08 '09
refrigerator
stored in a cold storage below 10℃℃℃℃,
period of circulation within 45 days
Fresh Cold Noodle WithPremium Dongchimi Broth
Fresh Cold Noodle WithSpicy Seasoning Broth
Contents
1. Project Overview
– Background & Objective
– Methodology
– Schedule
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– Schedule
2. Achievements
– Store Clustering
– Assortment & Arrangement
– Promotion
3. Key Benefits
4. Next Step
Category management is based on only sales rate, not by consumer’s changing life style
Project Overview Voice of Consumer
Problem is…
Stores don’t satisfy each consumer’s needs
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Project Overview
Background Objective
What is the regional
characteristics of the
consumers?
What is the right
1111
Differentiated stores should be able to satisfy consumers
Background & Objective
All store arrangements have
been assorted by sales
criteria, not consumer’s needs.
AssortmentConsumers have not been able to
find the products needed, ending
up buying a different product or
shopping at a different store
Retailers and manufacturers end up
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What is the right products for the
consumers' characteristic?
What is the right promotion for
the consumers' characteristic?
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• Store clustering by consumer’s
characteristic
• Differentiate products and
promotion by cluster
criteria, not consumer’s needs.Retailers and manufacturers end up
with a lot of ‘out of stock’ and too
much stock.
Under a very competitive
circumstance, promotions
have been focused on sales
rate, not consumers
characteristic
Consumer’s didn’t respond to the
promotion, and when not intention
purchase, didn’t purchase again
For retailer the promotion was
useless and for manufacturers
there were excessive products
Promotion
Project Overview
Eventually consumer’s satisfaction leads to increasing efficiency
Project Effect
� Purchase the product needed.
� Store and brand satisfaction
� Re-visit and re-purchase rate increase
Consumer
Create
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Retailer
� Sales increase by less out of stock products
� Expense reduce by stock reduce
� Consumer’s satisfaction and loyalty increase by store clustering.
� Sales increase by less out of stock products
� Expense reduce by stock reduce
� Brand loyalty increase
Supplier
Create Shopping Value
Shoppers’ Behavior Research
Store ClusteringDifferentiated Implementation
Evaluation Next Step
ImplementationHypothesis Evaluation
MethodologyProject Overview
Research on
• Plan for store
roll-out Execute
Differentiated
What we have done….
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• Shoppers’ purchase
pattern analysis report • Cluster Result Summary
• Cluster Mapping
• New Principle
• Differentiation Result
Report
• Executive Summary • Plan for store
roll-out
• Next Project
Plan
Project
Organi
zation
Project Evaluation
Research & analyze
surrounding environment
of stores
Analysis on consumers’
characteristics
customers’
purchase
decision tree
Research on
consumers’
purchase pattern
when facing
stock-outs
Define
Differentiated
Criteria
• 2nd Decade
Project Plan
Differentiated
Assortment
&
Arrangement
Execute
Differentiated
Promotion
10-month pilot test and 3-month roll-out to other stores
Tasks
Schedule
‘07 ‘08
11 12 1 2 3 4 5 6 7 8 9 10 11
Shoppers’ Behavior Research
Research on consumers’ purchase pattern when facing stock-outs
Research& Analyze purchase decision tree
ScheduleProject Overview
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tree
Store Clustering
Research & Analyze Store Environment
Store Consumer Analysis
Implementation
Define differentiated Criteria on Assortment &Arrangement, Promotion
Apply and evaluate differentiation on Assortment& Arrangement, Promotion
Evaluation
Evaluate cluster characteristic
Measure Test effect
Next Step Planning of expansion
Store
expansion
plan
Contents
1. Project Overview
– Background & Objective
– Methodology
– Schedule
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– Schedule
2. Achievements
– Store Clustering
– Assortment & Arrangement
– Promotion
3. Key Benefits
4. Next Step
Achievements
Consumers’ satisfaction recipe through collaboration
Store Managing Recipe
ReduceStock Holding Days
Promotion Source
Consumer’s Satisfaction Recipe
Key Message
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Stock Holding Days
Reduce Out-of-Stock
Product Development
Consumers’ Tastes
Assortment Source
Consumers’ Satisfactionservice level Improved Refrigerated Noodle
Shoppers’ Decision Tree
1st 2nd 3rd 4th
Family14%
Brand44%
Price24%
Cooking18%
A Group
30%
Achievements
Decision Tree research result
Consumers belong to 3 different groups in terms of decision buying tree
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase
decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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B Group
40% Brand10%
Cooking 48%
Family22%
Price20%
C Group
30%Brand10%
Family46%
Price23%
Cooking21%
* Research Period : ‘07 Nov ~ Dec
* N=5,300, Lotte Mart 53 stores, for consumers having purchased refrigerated noodles
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818
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37.2
Stock-outs leads consumers’ to choose different brands or not to purchase at all
Shoppers’ Reaction to Stock-out (1/2)
Manufacturer Retailer
Buy different products39.7%
Delay purchase37.2%
Consumers’ purchase patternwhen refrigerated noodles are out-of-stock
Achievements
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’
purchase pattern when facing
stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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43
32
21
2.6
12
19
20
11.5
25
20.4
28.2
Cosmetic Shampoo Snack Refrigerated
Noodle
39.7% 37.2%
Substitute Same brand 11.5%
Do not purchase20.4%
Substitute Different brand 28.2%
Buy at another store2.6%
In case of refrigerated noodles, when out of stock,
the rate of not buying the product and changing
brands are higher than other products.
Delay purchase
Substitute Different brands
Do not purchase
Substitute same brandsBuy at another store
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* Research Period : ‘08 Jan ~ Feb
* N=1,000, consumers intending to purchase refrigerated noodles at Lotte Mart
Invisible out-of-stock should be managed
Achievements Shoppers’ Reaction to Stock-out (2/2)
VendormanagementInventory KPI management
Disuse
Supply Chain Management Course of out-of-stock
Manageable Stock-outs Unmanageable stock-outs
• Non-entered
• A large amount of sales
• Disuse
• Non-arranged
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’
purchase pattern when facing
stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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DemandingForecasting Error
ProductionPlanned Error
Loss
Non-arrangedNon-assorted products
A largeamount of
sales
Non-Delivery
far to seek
• A large amount of sales
loss
• Non-arranged
• Non-assorted products
• far to seek
Store differentiation strategy increases level ofconsumer satisfaction
Key Finding
“Consumer’s purchase pattern
is effected by their life style”
“Consumer’s purchase pattern
is effected by their life style”
Achievements
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchase
pattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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“Product assortment according to
consumer’s life style can minimize
the rate of out of stock.”
“Product assortment according to
consumer’s life style can minimize
the rate of out of stock.”
“The consumer is satisfied when stores
are clustered and managed by
consumer’s life style.”
“The consumer is satisfied when stores
are clustered and managed by
consumer’s life style.”
Voice of ConsumerAchievements
WHEN‘when will I
eat?’
HOW‘ how will I eat ?’ WHO
‘ who will I eat with?’
How Much
By myself? With my family?Is it easy and convenient?
Consumers purchase products based on their life styles
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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Much‘ expensive?
Cheap?’
buy promoted product?buy according to brand?
Weekday? Weekend?
WHAT‘What will I
eat?’
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Achievements
Ready-to-cook product sales have been increasing
Refrigerated Noodle Market Trend
Pre-prepared food
Ready-to-Cook
Crossing Over
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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2005/04/24 2005/07/17 2005/10/09 2006/01/01 2006/03/26 2006/06/18 2006/09/10 2006/12/03 2007/02/25
Pre-prepared food Ready-to-cook
<TNS Purchase Pattern Research>
• Pre-prepared food: Noodles and sauce are packed together. Easy to cook without additional ingredients.
• Ready-to-Cook : Noodles and sauce are separated Mix-n- match by personal taste or purchase them individually
• TNS Research : Consumer purchase pattern data, POS data analyze specialist company
Refrigerated noodles can be categorized by the type of convenience
Ready-to-cook Pre-prepared food
Refrigerated Noodle
New Category Segmentation
Convenience
Achievements
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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1 2 3 4 1 2 3 4Size
Noodles and sauce are packed together.
Easy to cook without additional ingredients.
Noodles and sauce are separated. Mix-n- match by
personal taste or purchase them individually
Subcategory
4 61 4 61
SpaghettiSpaghetti
noodles
Udon
noodlesUdon Oriental noodle
Udon
sauce
Surrounding environment of stores have an influence on consumers’ purchasing type
Store Clustering (1/3)
Store location Sales rate by product convenience
Achievements
Ready-to-cook58%
Pre-prepared food42%
Apartment complex district (over 50%)
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyze
surrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
20* Lotte-Mart Location Analysis (08’ Jan ~ Mar)
Ready-to-cook 51%
Pre-prepared food 49%
Ready-to-cook41%
Pre-prepared food 59%
Office, shopping district (over 50%)
Private home district (over 50%)
Consumers’ occupations have an influence on their purchasing type
Store Clustering (2/3)
Consumer’s occupation
Office worker
Achievements
Sales rate by product convenience
Ready-to-cook58%
Pre-prepared food 42%
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyze
surrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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Self-employed
House-wife
* Lotte-Mart members card customer’s information Analysis (08’ Jan ~ Feb)
Ready-to-cook 51%
Pre-prepared food 49%
Ready-to-cook41%
Pre-prepared food 59%
Small
1 portion
Consumer’s family size
Single
Small Family
Store Clustering (3/3)Achievements
Family size of consumers have an influence on their purchasing type
20%
17%
67%
Sales rate by product size
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’
characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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Medium
Large
2~3 Portions
4-5 Portions
Small Family
Large Family
* Lotte-Mart members card customer’s information analysis (08’ Jan ~ Feb)
21%
58%
29%
12%
22%
54%
Cluster A
Store Clustering Summary
3 Clusters of consumers’ life style
Achievements
Definition of Consumer’s life style
• Progressive person who
refuses traditional values
• Westernized and trendy
• Not interested in realistic
problems
• Interested in leisure and
dilettante life
Characteristic of
Major Consumer
• Single men, women
and newly-weds in
their 20’s
• Mostly apartment
residents
Characteristic of Purchase pattern
High rate of purchasing convenient noodles
and 1 portion meals
Store Clustering
Cluster Result Summary
Cluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
23
Cluster B
Cluster C
* Lotte-Mart members card customer’s information analysis (08’ Jan ~ Feb)
dilettante life
• Technology oriented but not
leading, rather following and
family oriented
• Interested in shopping
• Interested in income and
savings
• Very Traditional
• A family oriented person
Interested in health, children,
relationship
• Waits for sale seasons
• Married women in
their 20’s~30’s
• Apartment, house
residents
• Consumers in their
30’s~40’s
• Big families
• Mostly house
residents
High rate of purchasing 4 portion meals and
discounted products
High rate of purchasing inconvenient noodle
and big portion meals
3 Types of clustered stores
Store Mapping
20 StoresCluster
A
Achievements
Office
Cluster ACluster B
Cluster C
Store Clustering
Cluster Result Summary
Cluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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24 Stores
13 Stores
ClusterB
Cluster C
Environment
Cluster C
Apartment
Factory
Quick-win Implementation
- Category Management Process -
We have focused on …
Achievements
1. Category Definition
2. Category Role
3. Category Assessment
2008’sProject
Assortment
Arrangement
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
25
3. Category Assessment
4. Category Scorecard
5.Category Strategies
6. Category Tactics
7. Implementation
8. C
ate
go
ry R
evie
w
Store Lay out
Communication
Merchandising
Store Development Program
Space
Promotion
Product Development
Differentiated CriteriaAchievements
Differentiation by convenience level of cooking
Cluster A
As- Is
To- Be Arrangement Assortment
Ready-to-cook
Pre-prepared food
+ -Ready-to-cook
60%Pre-prepared
food 40%
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define
Differentiate
d Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
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All storesOnly one
Plan-O-gramCluster B
Cluster C
As- Is
Ready-to-cook
Pre-preparedfood
Ready-to-cook 50%
Pre-prepared food 50%
Ready-to-cook
Pre-preparedfood
+-Ready-to-cook 40%
Pre-prepared food 60%
Cluster A Group
Assortment Implementation (1/4)
AfterBefore
Achievements
Out-of-stock
Out-of-stock
Out-of -stock
Out-of-stock
Out-of-stockOut-of-stock
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute Differentiated
Assortment
Execute DifferentiatedPromotion
27
Cool
* Lotte-Mart Suji store
All stores only one Plan-O-gramCool
Ready-to-cook
Pre-prepared food
Oriental Spicy
Out-of-stock Out-of-stock
Out-of-stock
Spicy OrientalCool
60% 40%
Ready-to-cook
Pre-prepared food
Cluster A Group Plan- O-gram
Assortment Implementation (2/4)Achievements
Cluster B Group
AfterBefore
Out-of-stock
Out-of-stock Out-of-stock
Out-of-stock Out-of-stock
Out-of-stock
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute Differentiated
Assortment
Execute DifferentiatedPromotion
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CoolCoolCool
Ready-to-cook
Pre-prepared food
Oriental Spicy
Out-of-stock
Out-of-stock
50% 50%
* Lotte-Mart Bupyeong store
Spicy Oriental
Ready-to-cook
Pre-prepared food
Cluster B Group Plan- O-gramAll stores only one Plan-O-gram
Cluster C Group
Assortment Implementation (3/4)Achievements
AfterBefore
Out- of-stock
Out-of-stockOut-of-stock
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute Differentiated
Assortment
Execute DifferentiatedPromotion
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OrientalCool
Ready-to-cook
Pre-prepared food
Oriental Spicy
Out-of-stockOut-of-stock
* Lotte-Mart Geumcheon store
40% 60%
Ready-to-cook
Pre-prepared food
Spicy CoolCool
Cluster C Group Plan- O-gramAll stores only one Plan-O-gram
Differentiated assortment has a positive effect
Assortment Implementation (4/4)Achievements
Cluster A - ++ 25%
- +- 25%
- +- 28%
Key Performance Indicator
SHD OOSSales Stock Holding Days Out of stock
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute Differentiated
Assortment
Execute DifferentiatedPromotion
30
Cluster B
Cluster C
- + - + - +
- ++ 20%
- +- 18%
- +- 29%
- + - + - ++ 35% - 12% - 31%
*POS data by Cluster, compared to previous year
Preferred types of promotion differ by consumers’ life style
Voice of ConsumerAchievements
20% Discount
Free
Household item
Buy 1 Get 1 Free~
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Differentiated promotions make different results?
Differentiated Criteria
Additional same product
Cluster A ?
Achievements
DC coupon
Additional alternative product
Main Product
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute Differentiated
Promotion
32
+ = Cluster B ?
Cluster C ?
* Implementation Period (08’ Jun ~ Jul)
Additional household item
20% Discount
Each cluster has a different result
Promotion Execution
Main Product Additional Products
Same Product Alternative Household item Discount
Achievements
Store Clustering
Cluster Result SummaryCluster Mapping
Research & analyzesurrounding environment of stores
Analysis on consumers’ characteristics
Shoppers’ Behavior Research
Shoppers’ purchasepattern analysis report
Research on customers’ purchase decision tree
Research on consumers’ purchase pattern when facing stock-outs
Differentiated Implementation
Differentiation Result report
Define Differentiated
Criteria
Execute DifferentiatedAssortment
Execute DifferentiatedPromotion
33
Cluster A
Cluster B
Cluster C
-13%+1% +10% -1%
-10% -5%
+12% -2%
+14% +5%
-3% +2%
• Implementation Period (08’ Jun ~ Jul)
Contents
1. Project Overview
– Background & Objective
– Methodology
– Schedule
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– Schedule
2. Achievements
– Store Clustering
– Assortment & Arrangement
– Promotion
3. Key Benefits
4. Next Step
Key Benefits
After differentiating clustering, sales increased, out-of-stock and stock holding days decreased
Quantitative Results
103,899
Normal Promotion
- Sales -
+28%
+24.6%
Out-of-Stock
-20%5.9
4.8
35• Period : Before (07’ May ~ Jul), After (08’ May ~ Jul)
95,565116,502
81,270+22%
Before After Before After
Stock Holding Days
-31%2.4
1.7
Before After
The brilliant recipe is to satisfy the consumer’s appetite
Qualitative Results Key Benefits
1. Consumer’s loyalty toward brands, on both manufacturers’ and
retailers’ side, increased
2. Consumer satisfaction rose
3. Preferable visit to stores increased
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Contents
1. Project Overview
– Background & Objective
– Methodology
– Schedule
37
– Schedule
2. Achievements
– Store Clustering
– Assortment & Arrangement
– Promotion
3. Key Benefits
4. Next Step
Next Step
Efficient consumer response project should be continued
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Store clustering based on consumer of life style